Yesterday, VanEck released four new exchange traded funds (ETFs) onto the market.
The new funds provide alternatives to consider for investors who are looking for thematic exposure to eSports, healthcare, wide-moat, and dividend companies.
Video Gaming and eSports ETF (ASX: ESPO)
This ETF invests in the world’s largest companies involved in global video game development, eSports, related hardware, and software by aiming to track the performance of the MVIS Global Video Gaming and eSports Index.
Each of the companies included in the index generates at least 50% of the revenues from video gaming and eSports. The index contains 25 companies, however, the top 10 holdings compromise over 60% of the portfolio weighting.
The largest holdings include NVIDIA Corporation (NASDAQ: NVDA) 8.9%, Advanced Micro Devices, Inc. (NASDAQ: AMD) 8.24% and Nintendo Co., Ltd (TYO: 7974) 7.57%. Interestingly, the index is well diversified geographically, with holdings in the United States (35.3%), Japan (22.5%), and China (18.2%).
The index has performed impressively, recording a one-year return of 68.23% and a five-year return of 37.44% p.a. The fund has a management fee of 0.55%.
If you’re bullish on the gaming sector, the ETF could form part of your tactical allocation. It offers unique exposure to the world’s largest companies, in addition to the added benefit of geographic diversification.
Global Healthcare Leaders ETF (ASX: HLTH)
This fund tracks The MarketGrader Developed Markets (ex-Australia) Health Care Net Return AUD Index – quite the mouthful. The index consists of 50 healthcare companies with the best growth at a reasonable price (GARP) attributes outside of Australia.
The GARP properties focus on fundamentals across four categories: growth, value, profitability, and cash flow.
The index is well diversified across weightings, with the largest holding, Align Technology, Inc. (NASDAQ: ALGN) just 3.08%. Geographically, the holdings are primarily domiciled in the United States, consisting of 53.4% of the index.
A consistent long-term performer, the index has achieved a one-year return of 26.47%, five-year return of 16.04% p.a. and a ten-year return of 21.54% p.a. with an attractive management fee of 0.45%.
The long-term outperformance is impressive for those looking to achieve fundamental-based healthcare exposure. This may form part of your core allocation to international exposure.
Morningstar World ex Australia Wide Moat ETF (ASX: GOAT)
This fund tracks the performance of The Morningstar Developed Markets ex-Australia Wide Moat Focus Index. The index invests in 50 to 100 ‘wide moat’ companies, as defined by Morningstar, whose competitive advantages will provide excess returns for 20 years or more.
Names you may recognise in the top 10 holdings include salesforce.com, inc. (NYSE: CRM) and Nike Inc (NYSE: NKE). Holdings are primarily domiciled in the United States, however, are well diversified, with the largest holding GEA Group AG (ETR: G1A) contributing 2.61% of net assets.
Across sectors, the largest weightings are Healthcare 24.3%, Industrials 19.7%, and Information Technology 17.4%. The index has yielded a robust 16.08% 10-year return p.a., however, recent performance has wavered with a 7.04% one-year return.
With a 0.55% management fee, those looking for exposure to global wide-moat companies may look to add this fund to their core portfolio.
Morningstar Australian Moat Income (ASX: DVDY)
This fund tracks The Morningstar Australia Dividend Yield Focus Index which aims to capture the highest dividend-paying ASX securities excluding A-REITs while also meeting Morningstar’s Economic Moat, Quantitative Economic Moat, and Distance to Default Measures.
The fund pays quarterly distributions, returning a one-year overall return of -1.93% and a five-year return of 6.24% p.a. Keep in mind the returns will include both capital and income, meaning the fund may pay distributions but the overall return may be negative due to movements in the share price.
24 companies make up the index, with the largest holdings Wesfarmers Ltd (ASX: WES) 11.12%, Transurban Group (ASX: TCL) 9.45% and Woolworths Group Ltd (ASX: WOW) 8.94%. The major sector weightings are Financials (27.3%), Industrials (25.6%) and Consumer Discretionary (25.0%).
For an income investor, the 0.35% management fee and exposure to top Australian dividend players remains appealing.
